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State of the Union

News/Business. Candy Crowley.

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Libya 28, U.s. 16, Syria 14, Us 14, America 6, Nato 6, Stephen Hadley 5, Michael Hayden 4, Jordan 4, Motrin 4, Washington 3, Iraq 3, Douglas Holtz Aiken 3, Alice Rivlin 3, United States 3, U.n. 3, Yemen 2, Advil Pm 2, Michigan 2, Iran 2,
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  CNN    State of the Union    News/Business. Candy Crowley.  

    March 27, 2011
    12:00 - 1:00pm EDT  

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the whistle. that's it for this edition of "reliable sources." join us again is next sunday. "state of the union with candy crowley" starts right now. why in the world is the u.s. military involved in libya? republicans are the toughest critics. there are echos inside the democratic party. >> i really don't believe that we have an obligation to get involved in every single occurrence in that part of the world. >> the immediate thing congress needs to do when it returns is to cut off any funds for containing libya. >> in a statement senator j. rockefeller wrote of serious concerns. our military and budget are stretched thin fighting two wars already.
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and i want to avoid getting into another conflict with unknown cost and consequences. tomorrow night, the president addresses the nation. today, a muddled mission against gadhafi. we talked to armed services carl levin and chaos throughout the mideast with former national security adviser stephen hadley and the former head of the cia, general michael hayden. and then assessing growing concern over japan's nuclear disaster with nuclear analyst joseph sorincioni and the impact on this with economist alice rivlin and douglas holtz aiken. i'm candy crowley and this is "state of the union." coalition air strikes pounding away at gadhafi's military power and anti-government insurgents have retaken a second city. brega. there is optimistic talk of
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moving all the way into gadhafi's stronghold of tripoli. the rebels are back on offense. we're on the homefront of the political arena, president obama plays defense. >> the role of american forces has been limited. we are not putting any ground forces into libya. our military is providing unique capabilities at the beginning. but this is now a broad international effort. >> among those looking for explanation and a little clarity, carl levin of michigan. democratic chair of the armed services committee which holds hearings on libya this week. he joins me now. are you -- you have talked to the president frequently in your position as head of the senate arms services committee. are you fully onboard with this mission? >> i am. i think it's the mission which has got a clear purpose. once the international community was onboard, which was absolutely critical to this mission beginning and succeeding, then it made sense that to be part of that international community in a limited mission with stated goals which there were, a number
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of very clearly stated goals, but limited. and then to see the kind of success which they're having now because of the support of that international community. very different, by the way, than the situation was in iraq where there was not international community support. and we went in anyway without that. there's a very clear difference. >> we should say there were troops other than the u.s. -- >> there was no u.s. support in iraq. it made a big difference. >> so if you can just -- can you give me a version of what this mission is? what are we doing there? >> we're there to prevent the slaughter of civilians in libya. and to make sure that that continues with a no-fly zone which will be maintained over libya, prevent gadhafi from
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reasserting control of the air. >> so i want to read something to you from "the new york times" friday. it was from a former nato commander. he wrote this. we should never begin an operation without knowing how we stand down. we did a no-fly zone over iraq for 12 years. it did nothing to get rid of saddam. so why do we think it will get rid of gadhafi? now, clearly, they said over and over again the mission isn't to get rid of gadhafi. but if the mission is to keep gadhafi from attacking his people, doesn't this seem like a fly over with no end? >> well, it will be -- it is a flyover which is succeeding. it has set gadhafi back. he's on his heels now moving his troops towards his capital very strong. but he has prevented the slaughter of libyan people. and that is what the trigger was for the president. >> don't you have to state -- the idea of the end game, like when does this stop? it doesn't seem that it can stop unless gadhafi is gone. and so even though everybody keeps saying, no, mission is not
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to get rid of gadhafi. how can you stop the mission unless gadhafi is gone? do you have any doubt that the minute both planes stop enforcing a no-fly zone he'll be back with his troops going after the rebels? >> it will depend on the circumstances that exist at that particular time. there's other means for moving gadhafi than military. we've seen that in other countries. we saw that in egypt where the people of egypt removed their dictator. the people of libya can remove their dictator. we're not the ones to remove him. we are the ones that is part of an international coalition that will prevent him from massacring his own people. >> so basically, this coalition, flyover is kind of the air force for the rebels. it pushes back tanks. it makes sure that he can't put anything up in the air. so, you know, the fact of the matter is it does seem that this coalition, including the u.s.,
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has to be prepared to stay there until the rebels can undo gadhafi. >> it's not just the rebels. it's the people who will ultimately undo gadhafi. it's also going to be economic sanctions. freeze of his assets. $30 billion his assets have been frozen. >> but do we have to stay there so long as he's in office? >> not necessarily. depends on -- depends on whether or not the other means, the economic means, the political means succeed and it depends on whether or not the people are able to contain him and ultimately remove him. the military mission is clearly stated, not to remove gadhafi. i didn't hear a lot of protest, by the way. the mission was stated to be limited. and stated that it's not going to be a mission which continual expands. the military was very much worried about a mission which would creep, as they put it. they wanted to know what the goals were. they were limited set goals, no troops on the ground.
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and that part of the mission seems to me is succeeding. the fact that it's going to take the people of libya to remove their dictator with the help of economic sanctions that the world has put in place and by the way, with a weakened gadhafi because of the success of this military mission doesn't mean that we're there for ever. it means that there are other means which are going to be utilized. >> sure. i guess what i'm saying is even a weakened gadhafi is a dangerous gadhafi. and it seems that there is no way out of this no-fly and help of the humanitarian assistance until he is gone. even if it's not the mission. he has to be gone and powerless. >> or so weakened and so put in a corner by his own people that he is unable to again start slaughtering his own people. >> let me ask something that secretary gates said on "meet
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the press when asked what the u.s. interests are in libya. he had this to say. >> i don't think it's vital interest of the united states. but we clearly have interests there. and it's a part of the region which is a vital interest for the united states. >> so, another way of asking this question, what's in it for the u.s.? >> a number of things. we want to be part of a world community to prevent a slaughter of large numbers of people. secondly, what's in it for us is there is a democratic movement afoot in the arab world. we should be on the side of that democratic movement. where we can do so is part of an international community which is unique. and that is the situation that exists in libya. there's a democratic movement that is moving in libya, part of a larger group -- >> there's one in syria, too. should we do something in syria? >> not unless the international community has said to us come help us remove this dictator.
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we should use other means in terms of limiting the power of dictators. and we have. but we cannot use military means to remove every dictator which unusual here. it really gives us an opportunity. the arab world said let us together remove a dictator. and that gives, it seems to me, a lot of support to our mission of supporting democracy in that area. >> africa is full of countries where leaders are slaughtering their people in the hundreds of thousands and we have done nothing about that. the tipping point to you is if they ask us to come and the international community supports it then we'll go. that's -- that's your -- >> that's key. absolutely critical. it's what you need here. and by the way, it was stated as being critical here. the secretary of state said we will not go. we will not go unless there's support by the international community. because otherwise, you have huge down side. otherwise, the people in the streets and the arab world are going to be demonstrating against us for intervening
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instead of demonstrating against their own dictator. >> and just quickly, there's one of the things that secretary gates was also asked was about whether we would arm the rebels, see to it. they're very underarmed as compared to gadhafi at this point. as secretary gates sees it, that is allowed under this u.n. resolution. would it be a good idea for the u.s. to arm these rebels? >> that will be a decision which will be made by a coalition and made again by the president who is thoughtful, who is deliberative and who is also cautious. because if the arms purpose, supplying arms to the rebels and the purpose of helping them to prevent a slaughter of our people, protect people, that's one thing. however, if those are just going to add fuel to a civil war, that's very different. because then it is not aimed at providing a cease-fire and the end of violence.
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those arms are going used offensively by the rebels will be adding fuel to that fire and will be inconsistent with what the u.n. resolution calls for which is a cease-fire. that is a decision which will be made by the president and coalition partners. >> so, the u.s. is unwilling to make unilateral decisions here when it comes to libya. >> i hope so. that is the secret to success is the coalition and international decision where unilateral decision can have significant downside. >> senator levin, you have hearing this is tuesday with the nato commander as your chief witness. talking about that. thank you so much for joining us today. up next, we'll get perspective on libya from two former intelligence officials, former cia director michael hayden and stefan hadley. we're america's natural gas. and here's what we did today: we put almost three million americans to work...
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joining me is michael hayden, former director of the cia and stephen hadley, former national security adviser. okay. it seems to me after talking to senator levin and after listening to the secretaries of
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state and defense that we're in this until gadhafi leaves. do you see any scenario under which this no-fly zone can stop being enforced and the coalition can leave and leave gadhafi in place? >> personally, i think we took the first military action, that was kind of the informal contract that we signed. we're in this until he goes away. he's loving this. he is loving the international attention. so frankly, his going away will have to be involuntarily. >> do you agree? >> i think that's right. the killing of civilians doesn't stop until he leaves. so if that's our objective, he's got to go. but also, that's what the president of the united states is saying. gadhafi needs to go. and the dilemma they got, they got an objective up here which is the president says that gadhafi needs to go and authorization from the u.n. that talks about protecting civilians and a question of what is the military force we're going to apply to those goals? i think the challenge for the administration is to square all that up much that's the challenge for the president
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monday night. >> right. and rhetorically, we're dancing on the head of a pin here. because clearly you can't stop exactly what i tried to ask, what you just said, you cannot stop him from attacking his own people until he's gone. i want to play you something that general carter hamm, used to be in charge of this operation, i want to ask you about this. but here's how he talked about the mission on friday with wolf blitzer. >> our mission is not to support the opposition forces. those who are causing civilian casualties are regime forces. when we destroy or degrade the capability of regime forces, certainly we're doing that and there is some benefit to the opposition. but we do not operate in direct support of the opposition forces. >> can you explain that to me? >> i can only imagine what general hamm is going through and particularly his tactical commanders. they try to square that circle.
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and at what point are gadhafi forces representing a clear and present danger to civilians as opposed to opposed enemy force from the opposition? it must be very difficult right now to apply the rules of engagement in the way that general hamm suggested. and as stephen and i are saying, in for a penny, in for a pound. this isn't over until gadhafi is gone. we need to square up our means with our objectives. >> i think the way the administration is trying to do that is this -- they are trying particularly going after the ground targets, the tanks, artillery and the like. they're trying to send a message to the libyan military that this is over and gadhafi needs to go. and encourage the military to turn against gadhafi. that's the first thing we want to do. the notion is if the military turns against them and is isolated and they will get rid of him.
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i think in parallel what you're going to see is they're going to try to start reaching out to the transition council that has been established, try to help organize the leaders of this uprising. and, third, i would hope that the libyan people will see this as an opportunity for them and they will begin to rise up again. the narrative we want is libyan people free themselves of the dictator. that is the freedom agenda. that is a narrative on which you can build a post gadhafi war. >> the u.s. getting rid of gadhafi is not going to work, not just in libya but across the middle east as much as they dislike him. let me ask you, if for some reason gadhafi should survive, he becomes a huge danger to the u.s., does he not? i mean we called for his removal. we bombed his military facilities and his tanks and killed some of his forces. and he's got money. so he could support terrorism across the world.
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>> it's also the symbolism to the middle east for mubarak who did things to reform to be gone and gadhafi who did not reform anticipate used forces against his own people to stay. that's somehow going to get blamed on us. and in the middle east, the people are going to read it as the united states wanted mubarak on and they wanted gadhafi to stay. that is a terrible outcome. and a terrible message to the middle east because basically says, you know, the way to stay is to use force against your own people which is exactly the opposite message we want to send. >> stand by. i want both of you to stand by. when we come back, we'll finish up on libya and look at some of the other hotspots in the middle east. [ male announcer ] ten people are going to win the chevrolet, buick, gmc or cadillac of their choice. push your onstar button and you could be one of them. even if you're not an onstar customer. ♪
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so much of what's happening in the middle east and northern africa was unthinkable just months ago. decades old repressive regimes are facing determined opposition. libya claims the headlines now but it was not the first nor the last country to rise in revolt. protests erupted friday and saturday in syria and government security forces opened fire killing dozens of demonstrators. the crackdown continues in bahrain where police use helicopters, jets, and tear gas to counter the demonstrations. pro and anti-government protesters hit the streets of yemen own friday as this country's president says he is ready to offer concessions. and over 100 people in jordan were injured during clashes in amman. we'll look at the big picture of what this all means for the middle east and the u.s. next.
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girl: mom, can i have a dollar? i think my purse is upstairs on the bed. it's not here. check the dining room. nope. the upstairs closet? announcer: moms everywhere are finding ways to keep kids active and healthy. get ideas. get involved. get going at letsmove.gov. we are back with general hey denk and stephen hadley. we hear all of this, nato will take, you know, command and control. they are ahead of it. we are not the head of it. the u.s. is going to step back. we'll give them the fuel they need for the flyover. is it all possible for the world's only remaining superpower to stay in the backseat of this? operation? >> well, i -- >> -- operation? >> i think we are in the name of the commander. keep in mind, the chain of command has two americans north of him in the organization chart.
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frankly, candy, there is capabilities that only we have. if there is any stress in this mission, suppressing enemy air defense, refueling, intelligence, surveillance, reconnaissance, combat search and rescue, precision strike, there's no one in our class within nato. so those are the american forces conducting those actions. >> this is a rhetorical flourish here that nato is in charge and we're in the backseat. >> i don't mean to trivialize. but there are some things that only we can do. and those some things are still needed. >> will we be flying planes -- is there any way to do it so we're not flying planes other than in a backup, you know, fueling position? >> no. i can't imagine that. >> we have to be in the no-fly zone. >> i think they're going to try so that the actual planes enforcing the no-fly zone are more allied planes than u.s.
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planes. maybe completely ally planes, not u.s. planes. but the enablers are going to continue to be americans. >> we looked around this week. yemen, syria, jordan. seems to me the greatest of these right now is syria where there has been a lot of bloodshed so far. what worries you about what is going on in syria? >> i think there's a terrific opportunity here. this is a -- syria is led by a dictator who supports terror. he oppressed his people. he's been disruptive in lebanon much he's been disruptive in iraq on action that's go americans kill in iraq. so the coming of freedom to syria is really a very hopeful thing. if that regime could be replaced by a regime that is more responsive to the aspirations of syrian people and going to look to actually beret lot of the syrian people, that will be a great thing for syrians. that will be a great thing for us in the middle east. and we're also sending a clear message to iran.
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syria is iran's closest friend. and if revolution and democracy and freedom can come to syria, that will give some hope to the iranian people that actually with the arabs finding their way to freedom, it's time for the iranian people to do so as well. >> is it ridiculous to ask well, should there be a no-fly zone in syria? i mean in some ways it's this, you know, there is a parallel here at the very least. you got a guy cracking down his own people. doesn't hesitate to kill them. has had emergency law in effect in that country, at least, for half a century. >> there are practical differences with regard to the strength of the syrian arms forces and libyan arms forces. frankly, the libyan opposition had gotten to the point where this truly was a civil war. they controlled territory. candy, i think the most important thing -- i may have been a little reluctant two or three weeks ago to be very active in libya. we are where we are now and we need success. we talked about gadhafi must go.
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he must go not because of libya but because of the region. if we fail in libya, we will teach assad and the leaders in tehran that if you're willing to kill enough of your own citizens, you get to stay in power with impunity. maybe the most important thing we can do with regard to syria right now is to succeed in libya. >> and what do you make of what's going on in jordan? i mean jordan and certainly saudi arabia, two of the closest -- used to be saudi arabia was upset with us. thee these are close u.s. allies. but it seems to me they're beginning to see -- certainly jordan is beginning to see some demonstration in their street. how do we handle that? >> these are countries that are different if syria. and iran. these are regimes that actually have tried to reform and to move in the direction more democracy and freedom for their people. i think our policy with respect to them needs to be to encourage them to do that, to say to them, you know, you need to accelerate the face of reform.
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you need to show your people that you're leading reform, not being a burial to reform. barrier to reform. and that i think distinguishes them from syria and from iran. i think the other thing we need to do in terms of policy with respect to libya is to get back to a narrative where this is not an intervention to overthrow dictator. we are enabling and empowering the libyan people to overthrow them. i think that's why we need to consider arming the rebels and let them within a tank weapons and anti-aircraft weapons, let them impose their own no-fly zone. in the end of the day, how this ends is when the libyan people can overthrow the tyrant, that's the narrative we want to establish. >> stephen hadley, michael hayden, as always, thank you so much. up next, the latest on efforts to contain the damaged nuclear power plant in japan. ( woman ) even with an overactive bladder,
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tokyo's electric power company is re-examining test results from the number two nuclear reactor at the fukushima power plant after the country's nuclear safety agency questioned extremely high radiation figures. earlier the power company said radiation levels are ten million times the norm in the water at that reactor. with me now here in washington to discuss the nuclear crisis in japan, joseph ritioni from a public grant foundation focused on nuclear weapons policy. i have to tell you, we discussed this every week since it happened. and, to me, it gets more and more confusing. at first you think this is catastrophic. and then people say, you know, it's not that much radiation. it's okay. can you -- can you compare this to something? can you give me some sense of how serious this is? i guess could become since it seems sort of never ending?
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>> this situation is extremely serious. it is an unprecedented situation. i was talking in the greens can room to stephen hadley about the possible meltdowns and he thought i was talking about the middle east. it is on the northern shores of japan where you have six nuclear reactors lined up in a row giving new meaning to definition of nuclear domino's. any one of these will be considered a serious situation. the fact you have all of them in critical condition at this same time makes this a uniquely challenging situation. we have possibility in three of the reactors, one, two and three of meltdowns. at least partial meltdowns are already under way in the cores. the fuel rods in the cores. and the fourth reactor, the core was taken out and put in the spent fuel pond. and they're jammed in with other fuel is a possibility that that could also melt or catch fire. you have these high radiation levels spiking up, spiking down, leading to a situation that,
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frankly, no one knows how to end. >> well, i was going to ask you, is this now beyond japan's ability to contain it? >> well, frankly, honestly, i do believe this is beyond the ability of japanese authorities and those heroic workers despite their best efforts to really contain. you have to understand what they're doing now is not in any safety manual. there's no plan for moving fire trucks on the beach and pumping seawater into reactor cores. there's no plan for what they're doing in the least threatening facilities, five and six, where they've had to punch holes in the wall to prevent a damage for potential hydrogen explosions. they're literally making this up as we go along. and the real danger is what we've been seeing today, the possibility of high levels of radiation whether it's going to be ten million times or just 1,000 time which is what the reading from the other reactor was. that could force the evacuation of workers. if it gets to be a wide scale evacuation, that means nobody to man the pumps, nobody to run the control rooms. that means the water levels drop in the pools and reactor cores.
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and that can lead to full meltdowns and possible breech of containment walls. >> and full meltdowns and breech of the containment walls means what? >> the best case is that these cores sort of melt down or partially melt down much it's all contained in these concrete boxes, basically. and then over the period of years, you would -- you have a slow period of pooling this radioactive mess. the worst case is that as they completely melt down and they punch through, they breech through the concrete walls spilling radioactive lava on to the beech, on to the surrounding area, spreading radioactivity over tens or hundreds of square kilometers. >> i know that the information has been frustrating to people like you coming out of japan, can you give me your best guess how this ends? >> my best guess is that there is going to be a bigger breech than we've already seen and we
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suspect the breeches in number two and number three reactors and that there will be a bigger breech that will force the evacuation and we'll see, i think, at least two core meltdowns and possibly two, maybe more pool fires and end very, very badly. that's what i actually think is going to happen. i hope i'm wrong. i hope they contain it. this will take weeks or months in the best case to contain it and keep the radioactivity in the concrete boxes and two, three, four years from now, we'll have concrete and sand mounds on each of these reactors dotting the japanese shoreline. that's going to be a monument that no one really wants to see. >> and then the little time we have left, if your worst case scenario happens, who is the most affected? is the entire allied japan or some segment of it? >> well, this is not like a chernobyl accident where intense radioactivity shot into the
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atmosphere and spread across the continent. this is a radiation problem for japan. it's unlikely that we in the united states are going to feel any effects of this. but it's at absolutely immediately the farmers and the people in that 20 kilometer radius around the facilities, whether they can return to their houses, again, is very doubtful. but you also have the nuclear power industry. japan depends for over 30% of its electricity on nuclear power. this is a blow that, frankly, i don't think the nuclear power industry in japan can recover from. it may cripple nuclear power construction around the world just as chernobyl and three mile island did. so that is the ripple effect that i'd be looking for from this crisis. >> joseph, thank you so much for your expertise. >> my pleasure. thank you for having me on. >> up next, what impact the crisis in japan and the unrest in the middle east are having on the global economy. nationwide insurance. talk to me.
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the butterfly he holds that the smallest change in a complicated system can cause big things to happen elsewhere. you have to wonder how major events in the middle east, libya, and japan are affecting economic recovery. crude oil prices are up 20% since mid-february when uprisings began in libya. a gallon of regular gas was more than 34 cents higher than it was a month ago. sales of new homes fell more than 16% last month. the lowest level since the government started keeping
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records. in the economic after shocks of japan's crisis, toyota of north america warned employees it may have to shut down auto production because of shortages of some japanese-made parts. american car manufacturers gm and ford have been affected, too. japanese manufacturers have also delayed production of critical components in the ipad. 60% of americans disapprove of the president's hands willing of the economy. his highest disapproval rating ever on the economy. alice rivlin, former director of the office of management and budget and douglas holtz aiken, former director of the congressional budget office are next. e, is all we humans get. we spend them on treadmills. we spend them in traffic. and if we get lucky, really lucky, it dawns on us to go spend them in a world where a simple sunrise can still be magic. twenty-five thousand mornings. make sure some of them are pure michigan.
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alice rivlin and douglas holtz aiken, thank you for joining us. every time we watch the stock market, the analysts say, you know, the oil did this and, therefore, the stock market's done that. what is the net effect of what's going on in the world? i know the markets doan the like things that aren't settled. but what about just every day living, you know, in america, looking for a recovery that is still sluggish? japan, has that affected the recovery at all? how about libya and the middle east in general? >> well, nothing is going on is good. japan, libya, whatever. the high price of oil and gasoline. all of these create uncertainty and to some extent a drag on the economy, especially the price of gasoline and oil.
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but none of it is major yet. the good news is the economy is perking along, not fast enough, very weak hiring, very weak in housing. but the rest of the economy does seem to be coming back slowly but steadily. >> what -- can you really have a recovery? in a housing market, we keep saying the housing market hit bottom. so now we've gone to the lowest ever in new home sales which is the most important. they provide jobs and building, et cetera. can you really have a recovery without a recovery in the housing market? >> there are two pieces to the housing recovery. the first is construction of new homes. and there we've seen the housing market go from just a really dragging the economy to about neutral. it's not adding or subjecting.
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subtracting. the second piece is the value which affects deeply how families feel about their futures and their ability to spend. there i think we're about to see the worst end. but until both of those start moving north, we're not going to see a really robust recovery. >> because it undermines consumer confidence. right? >> yes. >> and what about hiring and gas prices? isn't there some connection there? if i'm a business and suddenly my energy costs have come up whether it's a business that involves trucks or a business that involves heating or air conditioning in the summer, doesn't -- isn't that a drag on hiring people? >> yes. for some businesses, it is. the main effect is that consumers who have to buy gasoline will spend less on other things. so it's a drag from that sense. and for some energy intensive businesses as well. but we don't have as many of those as we are used to. we are not as dependent on energy. >> i think there are three lessons on the oil and gas
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front. lesson number one is we have oil at $140 a barrel in 2008. it went down not because we somehow discovered a lot more oil. it went down when the massive global recession as those have recovered, it was inevitable that prices were going to rise. and this was utterly foreseeable. second piece is that libya's not really the concern. that's not what is the problem. it's the broader middle east. libya is 2% of oil supplies. that's not our problem. it's what happens in the rest of the middle east. the third is, something like this is always going to happen. there is always some piece of bad news out there. the key should be to build an economy that's growing more robustly, more resilient to bad news that inevitably will happen and there we could do better. we've seen calls for more strategies this week from eric cantor, for example, and it really is time to get a strategy that is about having the economy grow faster. >> and so what i take from you is, yeah, around the margins this isn't great for the economy. however, when you look at the current state of the economy,
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sluggishness of recovery, what worries you most? >> what worries me most and i suspect doug as well is our looming debt crisis. we've got to get past this squabbling over the federal budget for this fiscal year. that's just a squabble. but what is really important is. that we are moving into a period when we will have debt rising rapidly because of the retirement or baby boom generation and high medical care costs. and we have to do something about that. it has to be bipartisan and we have to do it soon so that we reassure our world creditors that we are on the job? can you just -- i think people know the debt is a bad idea. and when they hear the trillions and trillions it is even worse idea. can you connect debt to my life, to the life of the viewers p >> if we continue down the path we're going down, what we see is
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interest rates creep up and elevate sharply. if you want to buy a car or house or send your son or daughter to college, it's a very expensive proposition. it means the place you work can't invest in the upgrades it wants to and really can't start giving you raises because they are carrying costs of their debt. you see in an economy that starts to stagnate and everyone suffers from that. it goes on for a long period of time. that's the good news scenario, the bad news is we see 2008 all over again where credit freezes up and we get a sharp recession. neither is something we should mess with. >> i was going to ask you, if the crisis remains a crisis and congress can't get its act together or do something about it, which i'm assume sing for you all cutting spending or raising taxes, some combination thereof, could we have a worse recession? >> yes, we could have a sovereign debt crisis. we used to think that only happened to small countries and other continents but it could
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happen to us as well. that means we would not be perceived as able to get our act together and pay our debts. and our creditors would lose confidence in us and when that happens, things go south very fast. we could have a big spike in interest rates, a big fall in the dollar and be plunged into a worse recession than the one we're climbing so slowly out of right now. >> let me ask you, speaking of congress getting its act together, an article in the "washington post" noting that this is the longest we have gone on a budget with these kind of incremental continuing resolutions. temporary spending bills for two weeks or three weeks while congress tries to decide how to fund the government. is there any harm in that? as long as they keep funding and of the government doesn't shut down, does it matter they are doing it in two and three we'll increments? >> yes, it does matter.
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there are two pieces of bad news. the first is, as former governor of a government-run agency, you can't make long-term commitments. you don't know if you can hire. it is impossible to manage. when we see federal agencies and so inefficient and bureaucratic, one part of the problem is congress. the second problem here is that it's a distraction from the bigger issue. the bigger issue is not the continuing resolution. it is the fact we're headed into a looming crisis and need to take on all kinds of spending. i would prefer to see the house and senate passing budget resolutions that take on the big programs. social security, medicaid, medicare. and develop a coherent strategy so we can grow rapidly and leave our children a better standard of living. we're not doing that. >> you've been around washington a long time. the co-chair of the debt commission. i know you think they ought to tackle entitlements. i'm assuming you agree?
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>> i agree with doug. this is not a partisan thing. we've got to get past this distraction of the immediate this fiscal year budget which does cause problems if it isn't addressed. and then we've got to get onto the longer run really fast. we've got to do it now because you can't do it quickly. when it has to do with people's retirement, you can't change that overnight. you have to change it slowly over a long period. but you need to start now to show that we can do it. >> there's actually a playbook that we could run that's been successful. if you need to control a big budget problem and you need to grow, then you need to keep taxes low and reform them. and we saw this week, the administration sort of back away from a key part of the tax reforms. we should do them. the second thing you need to do is cut spending and transfer programs and government employment. this has worked around the
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globe. puerto rico has undertaken a tremendously aggressive package of this type and being very successful. >> thank you for joining me. >> thank you. >> up next, a check of today's top headlines followed by fareed zakaria "gps."
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time for a check of today's top stories. rebels in libya are claiming victory in the key oil town. defense secretary gates tells cbs there is evidence moammar gadhafi is faking civilian casualties by coalition air strikes. >> we do have a lot of intelligence reporting about gadhafi taking the bodies of people he killed and putting them at the sites we attacked. we have been extremely careful in this military effort. >> the air strikes are continuing as nato prepares to take command of the libyan mission. president obama is among those paying tribute to geraldine ferraro, president she died yesterday after
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battling cancer for 12 years. she was the first woman nominated for a national office. his dautlers grow up in a more equal america because of jair all de geraldine ferraro. she might be best remembered for what she said at the 1984 democratic convention. >> choosing a run to run for our nation's second highest office, you send a powerful signal to all americans. there are no doors we cannot unlock. we will place no limits on achievement. if we can do this, we can do anything! >> it would be 24 years before another woman would run on a major ticket. sarah palin called geraldine

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